Project finance in theory and practice: designing, structuring, and financing private and public projects
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| Main Author: | |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Amsterdam [u.a.]
Elsevier/Academic Press
2013
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| Edition: | 2. ed. |
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Physical Description: | XXX, 464 S. |
| ISBN: | 9780123919465 |
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| 245 | 1 | 0 | |a Project finance in theory and practice |b designing, structuring, and financing private and public projects |c Stefano Gatti |
| 250 | |a 2. ed. | ||
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Record in the Search Index
| _version_ | 1804152925302292480 |
|---|---|
| adam_text | CONTENTS
PREFACE TO THE SECOND EDITION XV
PREFACE TO THE FIRST EDITION ....XIX
SCANNAPIECO S FOREWORD XXIII
FOREWORD XXV
ABOUT THE AUTHOR AND THE CONTRIBUTORS XXIX
CHAPTER 1 INTRODUCTION TO THE THEORY AND PRACTICE OF PROJECT FINANCE 1
INTRODUCTION 1
1.1 WHAT IS PROJECT FINANCE? 1
1.2 WHY DO SPONSORS USE PROJECT FINANCE? 2
1.3 WHO ARE THE SPONSORS OF A PROJECT FINANCE DEAL? 4
1.3.1 INDUSTRIAL SPONSORS IN PROJECT FINANCE INITIATIVES LINKED
TO A CORE BUSINESS 4
1.3.2 PUBLIC SPONSORS WITH SOCIAL WELFARE GOALS 4
1.3.3 CONTRACTOR/SPONSORS WHO DEVELOP, BUILD, OR RUN THE PLANT 8
1.3.4 FINANCIAL INVESTORS 9
1.4 OVERVIEW OF THE FEATURES OF PROJECT FINANCE 11
1.4.1 THE CONTRACTOR AND THE TURNKEY CONSTRUCTION CONTRACT (TKCC) 12
1.4.2 OPERATIONS AND MAINTENANCE CONTRACTOR AND THE O&M AGREEMENT 12
1.4.3 PURCHASERS AND SALES AGREEMENTS 13
1.4.4 SUPPLIERS AND RAW MATERIAL SUPPLY AGREEMENTS (RMSAS) 13
1.4.5 PROJECT FINANCE AS A RISK MANAGEMENT TECHNIQUE 13
1.5 THE THEORY OF PROJECT FINANCE 14
1.5.1 SEPARATE INCORPORATION AND AVOIDANCE OF CONTAMINATION RISK 15
1.5.2 CONFLICTS OF INTEREST BETWEEN SPONSORS AND LENDERS
AND WEALTH EXPROPRIATION 19
1.5.3 PROJECT FINANCE IN THE ACADEMIC LITERATURE 21
CHAPTER 2 THE MARKET FOR PROJECT FINANCE: APPLICATIONS AND SECTORS 27
INTRODUCTION .... 27
2.1 HISTORICAL EVOLUTION OF PROJECT FINANCE AND MARKET SEGMENTS 27
2.2 THE GLOBAL PROJECT FINANCE MARKET 29
2.3 THE EVOLUTION OF THE PPP MARKET 34
2.3.1 THE EUROPEAN MARKET.. 37
CHAPTER 3 PROJECT CHARACTERISTICS, RISK ANALYSIS, AND RISK MANAGEMENT 43
INTRODUCTION 43
3.1 IDENTIFYING PROJECT RISKS 45
3.1.1 PRECOMPLETION PHASE RISKS 45
3.1.1.1 ACTIVITY PLANNING RISK ...45
3.1.1.2 TECHNOLOGICAL RISK 46
V
VI CONTENTS
3.1.1.3 CONSTRUCTION RISK OR COMPLETION RISK 46
3.1.2 POSTCOMPLETION PHASE RISKS 47
3.1.3 RISKS FOUND IN BOTH THE PRE- AND POSTCOMPLETION PHASES 47
3.1.3.1 INTEREST RATE RISK 48
3.1.3.2 EXCHANGE RATE RISK 49
3.1.3.3 DERIVATIVES CONTRACTS FOR MANAGING INTEREST RATE RISK
AND EXCHANGE RISK 49
3.1.3.4 INFLATION RISK 52
3.1.3.5 ENVIRONMENTAL RISK 54
3.1.3.6 REGULATORY RISK 55
3.1.3.7 POLITICAL RISK AND COUNTRY RISK 55
3.1.3.8 LEGAL RISK 56
3.1.3.9 CREDIT RISK OR COUNTERPARTY RISK 57
3.2 RISK ALLOCATION WITH CONTRACTS STIPULATED BY THE SPV 57
3.2.1 ALLOCATION OF CONSTRUCTION RISK: THE TURNKEY (OR ENGINEERING,
PROCUREMENT, AND CONSTRUCTION [EPC]) AGREEMENT 58
3.2.2 ALLOCATION OF SUPPLY RISK: PUT-OR-PAY AGREEMENTS 60
3.2.3 ALLOCATION OF OPERATIONAL RISK: OPERATIONS AND
MAINTENANCE (O&M) AGREEMENTS 61
3.2.4 ALLOCATION OF MARKET RISK 62
3.2.4.1 OFFTAKE AGREEMENTS 64
3.2.4.2 OFFTAKE CONTRACTS IN THE POWER SECTOR 64
3.2.4.3 OFFTAKE AGREEMENTS IN PPP INITIATIVES 71
3.3 SUMMARY OF THE RISK MANAGEMENT PROCESS 75
CHAPTER 4 THE ROLE OF ADVISORS IN A PROJECT FINANCE DEAL 77
INTRODUCTION 77
4.1 THE ROLE OF LEGAL ADVISORS IN PROJECT FINANCE DEALS 78
4.1.1 LEGAL ADVISOR, LEGAL ADVISORS, AND LAW FIRMS: INTERNATIONAL
AND LOCAL LEGAL COUNSEL 79
4.1.2 PROJECT FINANCING DEVELOPMENT STAGES AND IMPACTS ON
THE ROLE OF LEGAL ADVISORS 81
4.1.2.1 FORMING THE GROUP OF SPONSORS 81
4.1.2.2 INDUSTRIAL DEVELOPMENT OF THE PROJECT*THE PROJECT DOCUMENTS 83
4.1.2.3 PROJECT FINANCING*THE FINANCE DOCUMENTS 85
4.1.2.4 THE DUE DILIGENCE LEGAL REPORT 86
4.1.2.5 LEGAL OPINIONS 87
4.1.2.6 SYNDICATING THE FINANCING 88
4.1.2.7 THE OPERATING PERIOD: MAINTENANCE OF THE PROJECT FINANCING 89
4.2 THE ROLE OF THE INDEPENDENT ENGINEER IN PROJECT FINANCE DEALS 89
4.2.1 INITIAL DUE DILIGENCE REPORTING 90
4.2.1.1 DOCUMENTS REQUIRED FOR THE DUE DILIGENCE ACTIVITY 91
4.2.1.2 ACCESSORY SERVICES 92
4.2.1.3 DOCUMENTS PRODUCED DURING THE DUE DILIGENCE ACTIVITY PHASE 92
CONTENTS VII
4.2.2 MONITORING REALIZATION OF THE PROJECT (ENGINEERING AND
CONSTRUCTION) 92
4.2.2.1 MONITORING CONSTRUCTION OF THE WORKS 93
4.2.2.2 ISSUING PROGRESS REPORTS 95
4.2.2.3 VALIDATION OF MECHANICAL COMPLETION (WORKS COMPLETION
CERTIFICATE) 96
4.2.3 ASSISTANCE AT THE TIME OF PLANT ACCEPTANCE 97
4.2.3.1 VALIDATION OF THE PROVISIONAL ACCEPTANCE CERTIFICATE (PAC) 98
4.2.3.2 MONITORING THE TESTING PHASE 99
4.2.3.3 VALIDATION OF THE FINAL ACCEPTANCE CERTIFICATE (FAC) 101
4.2.4 MONITORING OPERATIONS MANAGEMENT 102
4.3 THE ROLE OF INSURANCE ADVISORS AND INSURANCE COMPANIES IN PROJECT
FINANCE DEALS 103
4.3.1 RATIONALE FOR USING INSURANCE IN PROJECT FINANCE DEALS 104
4.3.2 WHEN SHOULD INSURANCE PRODUCTS BE USED? 105
4.3.3 AREAS WHERE THE INSURANCE ADVISOR IS INVOLVED 106
4.3.3.1 PRELIMINARY INSURANCE REPORT PHASE 106
4.3.3.2 FINAL INSURANCE REPORT PHASE*CONSTRUCTION PHASE 106
4.3.3.3 FINAL INSURANCE REPORT PHASE*OPERATIONS PHASE 107
4.3.3.4 THE MOST PROBLEMATIC AREAS 107
4.3.4 TYPES OF CONVENTIONAL AND FINANCIAL INSURANCE PRODUCTS
AVAILABLE FOR PROJECT FINANCE DEALS 108
4.3.4.1 INSURANCE COVERAGE DURING THE CONSTRUCTION PHASE 109
4.3.4.2 INSURANCE COVERAGE DURING THE OPERATIONS PHASE ILL
4.3.4.3 BONDING ILL
4.3.5 INTEGRATED INSURANCE SOLUTIONS*STRUCTURE AND CONTENT 112
4.3.6 CLASSIFICATION OF INSURANCE UNDERWRITERS 113
CHAPTER 5 VALUING THE PROJECT AND PROJECT CASH FLOW ANALYSIS 117
INTRODUCTION 117
5.1 ANALYSIS OF OPERATING CASH FLOWS AND THEIR BEHAVIOR IN DIFFERENT
PROJECT LIFE CYCLE PHASES 118
5.1.1 INPUTS FOR CALCULATING CASH FLOWS 121
5.1.1.1 THE TIMING OF THE INVESTMENT 121
5.1.1.2 INITIAL INVESTMENT COST 123
5.1.1.3 VAT*VALUE-ADDED TAX 125
5.1.1.4 PUBLIC GRANTS 126
5.1.1.5 ANALYSIS OF THE SALES CONTRACT, THE SUPPLY CONTRACT,
AND OPERATING EXPENSES 129
5.1.1.6 TRENDS IN WORKING CAPITAL 131
5.1.1.7 TAXES 135
5.1.1.8 MACROECONOMIC VARIABLES 135
5.2 DEFINING THE OPTIMAL CAPITAL STRUCTURE FOR THE DEAL 136
5.2.1 EQUITY 138
5.2.2 SENIOR DEBT . 139
5.2.3 VAT FACILITY 142
VIII CONTENTS
5.2.4 STAND-BY FACILITY 143
5.2.5 IDENTIFYING SUSTAINABLE DEBT/EQUITY MIXES FOR SPONSORS AND LENDERS
144
5.2.5.1 OPTIMAL CAPITAL STRUCTURE FOR PROJECT SPONSORS 144
5.2.5.2 OPTIMAL CAPITAL STRUCTURE FOR LENDERS. 147
5.3 COVER RATIOS 152
5.3.1 WHAT COVER RATIOS CAN TELL US AND WHAT THEY CANNOT 154
5.3.1.1 DEBT SERVICE COVER RATIO (DSCR) 154
5.3.1.2 LOAN LIFE COVER RATIO (LLCR) 156
5.3.2 COVER RATIOS AS AN APPLICATION OF THE CERTAINTY EQUIVALENTS
METHOD 159
5.4 SENSITIVITY ANALYSIS AND SCENARIO ANALYSIS 160
5.4.1 WHICH VARIABLES SHOULD BE TESTED IN SENSITIVITY ANALYSIS? 162
CHAPTER 6 FINANCING THE DEAL 167
INTRODUCTION 167
6.1 ADVISORY AND ARRANGING ACTIVITIES FOR PROJECT FINANCE FUNDING 167
6.1.1 ADVISORY SERVICES 169
6.1.2 ARRANGING SERVICES 173
6.1.3 INTEGRATION OF ADVISORY AND ARRANGING SERVICES 174
6.2 OTHER ROLES IN SYNDICATED LOANS 180
6.2.1 SINGLE-STAGE SYNDICATION, TWO-STAGE SYNDICATION, AND CLUB DEALS.
181
6.3 FEE STRUCTURE 183
6.3.1 FEES FOR ADVISORY SERVICES 183
6.3.2 FEES FOR ARRANGING SERVICES 184
6.3.3 FEES TO PARTICIPANTS AND THE AGENT BANK 184
6.3.4 EXAMPLE OF FEE CALCULATION 186
6.4 INTERNATIONAL FINANCIAL INSTITUTIONS AND MULTILATERAL BANKS 188
6.4.1 MULTILATERAL ORGANIZATIONS 190
6.4.1.1 WORLD BANK GROUP 191
6.4.2 REGIONAL DEVELOPMENT BANKS 197
6.4.2.1 EUROPEAN INVESTMENT BANK (EIB) 198
6.4.2.2 AFDB (AFRICAN DEVELOPMENT BANK) 199
6.4.2.3 IDB (ISLAMIC DEVELOPMENT BANK) 201
6.4.2.4 ADB (ASIAN DEVELOPMENT BANK) 202
6.4.2.5 EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD) 203
6.4.2.6 INTER-AMERICAN DEVELOPMENT BANK (IADB) 204
6.5 BILATERAL AGENCIES: DEVELOPMENTAL AGENCIES AND EXPORT CREDIT
AGENCIES (EGAS) 204
6.5.1 DEVELOPMENTAL AGENCIES 204
6.5.2 EXPORT CREDIT AGENCIES (ECAS) 206
6.5.2.1 FINANCING ACTIVITY 207
6.5.2.2 INSURANCE ACTIVITY 208
6.6 OTHER FINANCIAL INTERMEDIARIES INVOLVED IN PROJECT FINANCE 212
6.7 FUNDING OPTIONS: EQUITY 217
CONTENTS IX
6.7.1 TIMING OF THE EQUITY CONTRIBUTION AND STAND-BY EQUITY
AND EQUITY ACCELERATION.... 217
6.7.2 CAN SHARES IN AN SPV BE LISTED ON A STOCK EXCHANGE? 219
6.8 FUNDING OPTIONS: MEZZANINE FINANCING AND SUBORDINATED DEBT..., 219
6.9 FUNDING OPTIONS: SENIOR DEBT 229
6.9.1 THE BASE FACILITY 229
6.9.2 WORKING CAPITAL FACILITY 229
6.9.3 STAND-BY FACILITY 230
6.9.4 VAT FACILITY ! 230
6.9.5 LOAN REMUNERATION 230
6.9.6 LOAN CURRENCY 231
6.9.7 REPAYMENT OPTIONS 231
6.9.8 REFINANCING LOANS ALREADY GRANTED TO THE SPV 238
6.9.8.1 SOFT REFINANCING (WAIVER) 238
6.9.8.2 HARD REFINANCING 239
6.10 PROJECT LEASING 242
6.10.1 VALUING THE CONVENIENCE OF A PROJECT LEASING 243
6.10.2 THE TAX EFFECT 245
6.11 PROJECT BONDS 246
6.11.1 INVESTORS IN PROJECT BONDS 248
6.11.2 VARIOUS CATEGORIES OF PROJECT BONDS 249
6.11.2.1 NATIONALITY OF THE ISSUER IN TERMS OF ISSUE CURRENCY
FOR SECURITIES AND PLACEMENT MARKET 249
6.11.2.2 TARGET INVESTORS 250
6.11.2.3 CAPITAL AND INTEREST PAYMENT GUARANTEES 251
6.11.2.4 SUBORDINATION CLAUSES 252
6.11.2.5 INTEREST CALCULATION METHOD 252
6.11.2.6 CAPITAL REPAYMENT METHOD 252
6.11.3 MUNICIPAL BONDS 253
6.11.4 WHEN SHOULD PROJECT BONDS BE USED? 254
6.11.4.1 INVESTOR TARGET : 255
6.11.4.2 TENOR OF FINANCING 255
6.11.4.3 PRESERVATION OF THE SPONSORS FINANCIAL FLEXIBILITY 255
6.11.4.4 INFLATION-LINKED BONDS 256
6.11.4.5 STRUCTURE FOR UTILIZATION AND REPAYMENT OF FUNDING 256
6.11.4.6 CREDIT POLICIES AND MARKET SENTIMENT 256
6.11.4.7 FIXING THE FINANCING TERMS AND CONDITIONS 257
6.11.4.8 CONFIDENTIALITY 257
6.11.4.9 COVENANTS AND MONITORING MANAGEMENT OF THE PROJECT 257
6.11.4.10 RENEGOTIATION OF CONTRACTUAL CONDITIONS AND REFINANCING 258
6.11.5 PROCEDURE FOR ISSUING PROJECT BONDS 258
6.11.5.1 RATING AGENCIES 259
6.11.5.2 BOND PAYING AGENT AND TRUSTEE 262
6.11.5.3 CHOICE OF THE PROJECT BOND BOOKRUNNER 263
CONTENTS
6.11.5.4 SETTING UP THE SYNDICATE: MANAGERS AND SELLING GROUP 263
6.11.5.5 THE SUBSCRIPTION AGREEMENT 265
6.11.5.6 THE FINAL BOND PROSPECTUS 266
CHAPTER 7 LEGAL ASPECTS OF PROJECT FINANCE 26?
INTRODUCTION - 267
7.1 THE PROJECT COMPANY 268
7.1.1 REASONS FOR INCORPORATING THE PROJECT IN A PROJECT COMPANY 269
7.1.1.1 DEFENSIVE/PROTECTIVE REASONS 269
7.1.1.2 POSITIVE REASONS 269
7.1.2 THE PROJECT COMPANY AS A JOINT VENTURE: ANOTHER REASON TO
DEVELOP A PROJECT IN AN SPV 270
7.1.3 THE PROJECT COMPANY AND GROUPS OF COMPANIES 270
7.1.4 CORPORATE DOCUMENTATION: ARTICLES OF INCORPORATION 271
7.1.5 OUTSOURCING THE CORPORATE FUNCTIONS OF THE PROJECT COMPANY:
HOW THE COMPANY/PROJECT IS ACTUALLY RUN 271
7.2 THE CONTRACT STRUCTURE 272
7.2.1 BEFORE THE FINANCING: THE DUE DILIGENCE REPORT AND THE
TERM SHEET 273
7.2.1.1 DUE DILIGENCE REPORT 273
7.2.1.2 THE TERM SHEET 274
7.2.2 CLASSIFICATION OF PROJECT DOCUMENTS 276
7.2.3 THE CREDIT AGREEMENT 277
7.2.3.1 OVERVIEW 277
7.2.3.2 INTERPRETATION 278
7.2.3.3 THE CREDIT FACILITIES 278
7.2.3.4 CONDITIONS PRECEDENT: AVAILABILITY OF DRAWDOWNS 279
7.2.3.5 INTEREST ON DRAWDOWNS 280
7.2.3.6 REPAYMENT OF THE LOANS: CANCELLING THE FACILITY 282
7.2.3.7 CREDIT AGREEMENT COSTS 283
7.2.3.8 INFORMATION FLOW FROM BORROWERS TO LENDERS: FINANCIAL RATIOS 284
7.2.3.9 DISTRIBUTIONS 285
7.2.3.10 REPRESENTATIONS 286
7.2.3.11 THE PROJECT COMPANY S COVENANTS 288
7.2.3.11.1 POSITIVE COVENANTS 288
7.2.3.11.2 NEGATIVE COVENANTS 289
7.2.3.12 EVENTS OF DEFAULT AND THEIR CONSEQUENCES: THE FINANCIAL
CRISIS OF THE TRANSACTION 290
7.2.3.13 ROLE OF THE AGENT 293
7.2.3.14 THE ACCOUNT BANK: BRIEF COMMENTS ON THE ACCOUNT
STRUCTURE AND THE MONITORING OF PAYMENTS 294
7.2.3.15 ASSIGNMENT OF THE CREDIT AGREEMENT: ASSIGNMENT AFTER
SYNDICATION 297
7.2.3.16 RESERVED DISCRETIONS 297
CONTENTS XI
7.2.4 SECURITY DOCUMENTS: SECURITY INTERESTS AND WHAT THEY DO 298
7.2.4.1 INTRODUCTION TO THE SYSTEM OF SECURITY IN PROJECT FINANCE 298
7.2.4.2 COMMON PROVISIONS IN THE SECURITY DOCUMENTS 301
7.2.4.3 PLEDGE ON PROJECT COMPANY SHARES 301
7.2.4.4 SECURITY ON THE PROJECT COMPANY S RECEIVABLES 302
7.2.4.5 SECURITY ON THE PROJECT COMPANY S BANK ACCOUNTS 303
7.2.4.6 MORTGAGE ON THE PROJECT S PROPERTY 303
7.2.4.7 SECURITY ON OTHER PROJECT COMPANY ASSETS 304
7.2.4.8 DIRECT AGREEMENTS 304
7.2.4.9 ENFORCING SECURITY INTEREST AND LENDERS STEP-IN RIGHTS 305
7.2.5 OTHER FINANCE DOCUMENTS 307
7.2.5.1 EQUITY CONTRIBUTION AGREEMENT 307
7.2.5.2 INTERCREDITOR AGREEMENT 308
7.2.5.3 HEDGING AGREEMENTS 309
7.2.6 PROJECT AGREEMENTS 310
7.2.6.1 INTRODUCTION 310
7.2.6.2 CONSTRUCTION CONTRACT 311
7.2.6.3 OPERATIONS AND MAINTENANCE (O&M) AGREEMENT 315
7.2.6.4 OFFTAKE AGREEMENTS 316
7.2.6.5 HOST-COUNTRY AGREEMENTS 317
7.2.6.6 OTHER PROJECT AGREEMENTS 318
7.3 REFINANCING PROJECT FINANCE DEALS 319
CHAPTER 8 CREDIT RISK IN PROJECT FINANCE TRANSACTIONS 321
INTRODUCTION 321
8.1 THE BASEL COMMITTEE S POSITION ON STRUCTURED FINANCE TRANSACTIONS
(SPECIALIZED LENDING) 326
8.1.1 CLASSES OF TRANSACTIONS INCLUDED IN SPECIALIZED LENDING 328
8.2 RATING CRITERIA FOR SPECIALIZED LENDING AND THEIR APPLICATION
TO PROJECT FINANCE 329
8.2.1 FINANCIAL STRENGTH 329 I
8.2.2 POLITICAL AND LEGAL ENVIRONMENT 329
8.2.3 TRANSACTION CHARACTERISTICS 330
8.2.4 STRENGTH OF SPONSORS 330
8.2.5 MITIGANTS AND SECURITY PACKAGE 330
8.2.6 SUMMARY OF GRADING CRITERIA 331
8.3 RATING GRADE SLOTTING CRITERIA OF THE BASEL COMMITTEE AND
RATING AGENCY PRACTICES 331
8.4 THE BASEL ACCORD AND THE TREATMENT OF CREDIT RISK FOR PROJECT
FINANCE LOANS: IS PROJECT FINANCE MORE RISKY THAN CORPORATE LOANS? 333
.8.5 EMPIRICAL STUDIES ON PROJECT FINANCE DEFAULTS AND RECOVERY RATES
336
8.5.1 INTERNATIONAL FINANCE CORPORATION STUDY 336
8.5.2 THE INTERNATIONAL CONSORTIUM OF ABN AMRO, CITIBANK,
DEUTSCHE BANK, AND SOCIETE GENERATE 338
XII CONTENTS
8.5.3 RECENT DEVELOPMENTS IN THE EMPIRICAL ANALYSIS OF PROJECT
FINANCE DEFAULT AND RECOVERY RATES 340
8.5.3.1 MOODY S (OCTOBER 2010) 341
8.5.3.2 STANDARD AND POOR S (AUGUST 2007 AND OCTOBER 2010) 346
8.6 INTRODUCTION TO THE CONCEPTS OF EXPECTED LOSS, UNEXPECTED LOSS,
AND VALUE AT RISK 347
8.7 DEFINING DEFAULT FOR PROJECT FINANCE DEALS 353
8.8 MODELING THE PROJECT CASH FLOWS 355
8.8.1 DEFINING A RISK ASSESSMENT MODEL 355
8.8.2 IDENTIFYING PROJECT VARIABLES AND KEY DRIVERS 355
8.8.3 INPUT VARIABLES: ESTIMATION AND DATA COLLECTION 356
8.8.4 ESTIMATING PROJECT CASH FLOW AND VALUING RESULTS 364
8.9 ESTIMATING VALUE AT RISK THROUGH SIMULATIONS 364
8.10 DEFINING PROJECT VALUE IN THE EVENT OF DEFAULT 367
8.10.1 DETERMINISTIC VERSUS STOCHASTIC LGD ESTIMATES 367
8.10.2 LGD DRIVERS: THE VALUE OF UNDERLYING ASSETS VERSUS
DEFAULTED PROJECT CASH FLOWS 368
8.10.3 RESTRUCTURING VERSUS DEFAULT 368
CASE STUDY 1 COGENERATION 1 371
1.1 THE SITUATION 371
1.2 THE PRODUCTION PROCESS 371
1.3 THE SPONSORS OF THE DEAL 373
1.4 THE AGREEMENTS UNDERPINNING THE DEAL 373
1.4.1 COGENERATION 1 CONSTRUCTION AGREEMENT 373
1.4.2 DEASPHALTING PLANT CONSTRUCTION AGREEMENT 374
1.4.3 OPERATION AND MAINTENANCE AGREEMENT 375
1.4.4 ENERGY SALE/POWER PURCHASE AGREEMENT 375
1.4.5 STEAM PURCHASE AGREEMENT 375
1.4.6 FEEDSTOCK SUPPLY AGREEMENT 375
1.4.7 OXYGEN SUPPLY AGREEMENT 376
1.5 THE FINANCIAL STRUCTURE 376
1.6 FINAL: IN ARRIGONI S OFFICE 376
CASE STUDY 2 ITALY WATER SYSTEM 377
INTRODUCTION 377
2.1 THE BUSINESS PLAN OF THE PROJECT 377
2.2 ASSUMPTIONS 377
2.2.1 TIMING 378
2.2.2 INFLATION INDEX 378
2.2.3 DEPRECIATION 378
2.2.4 INTERESTS AND FINANCIAL COSTS 378
2.2.5 INTEREST ON POSITIVE CASH BALANCES 379
CONTENTS XIII
2.2.6 VALUE-ADDED TAX (VAT) 379
2.2.7 TAXES 379
2.2.7.1 IRES (CORPORATE INCOME TAX) 379
2.2.7.2 IRAP (REGIONAL TAX ON PRODUCTIVE ACTIVITIES) 379
2.2.8 WORKING CAPITAL 379
2.2.9 DEBT SERVICE RESERVE ACCOUNT 380
2.3 CAPITAL EXPENDITURE 380
2.4 FINANCIAL REQUIREMENT AND SOURCES OF FINANCING 380
2.4.1 FINANCIAL SOURCES 380
2.4.1.1 DEBT FACILITY 381
2.4.1.2 VAT REVOLVING FACILITY 382
2.4.1.3 GUARANTEE FACILITY 382
2.4.1.4 EQUITY 383
2.4.1.5 PUBLIC GRANTS 383
2.4.1.6 CASH ROW DURING CONSTRUCTION 383
2.5 OPERATIONAL PERIOD 383
2.5.1 OPERATION OF THE EXISTING WATER SYSTEM 383
2.5.2 OPERATION OF THE NEW WATER SUPPLY AND TREATMENT SYSTEMS 384
2.5.3 OPERATION OF THE TWO HYDROELECTRIC PLANTS 384
2.6 ECONOMIC AND FINANCIAL RATIOS 385
CASE STUDY 3 QUEZON POWER LTD. CO 387
3.1 THE PROJECT 387
3.1.1 PROJECT SPONSORS, OWNERSHIP STRUCTURE, AND BASIC TERMS OF
FINANCING 387
3.1.2 THE CONTRACTUAL STRUCTURE OF QUEZON POWER PROJECT 390
3.1.2.1 POWER PURCHASE AGREEMENT (PPA) 390
3.1.2.2 LEASES 392
3.1.2.3 TRANSMISSION LINE AGREEMENT 392
3.1.2.4 ENGINEERING, PROCUREMENT CONTRACT (EPC), AND
CONSTRUCTION MANAGEMENT 393
3.1.2.5 MANAGEMENT SERVICE 393
3.1.2.6 OPERATION AND MAINTENANCE (O&M) 393
3.1.2.7 COAL SUPPLY AGREEMENT 393
3.1.2.8 WHEELING AGREEMENT 394
3.2 THE PROBLEM ,.,* ,..*,.**..* ,**.. .394
CASE STUDY 4 MILAN METRO LINE 5 395
4.1 BACKGROUND OF THE DEAL 395
4.2 DESCRIPTION OF THE WORKS 396
4.3 PROJECT SPONSORS 398
4.3.1 ASTALDI S.P.A (ASTALDI) 398
4.3.2 TORNO INTERNAZIONALE S.P.A (TORNO) 399
4.3.3 ANSALDOBREDA S.P.A (ANSALDOBREDA) 399
4.3.4 ANSALDO TRASPORTI-SISTEMI FERROVIARI S.P.A (ANSALDO) 399
XIV CONTENTS
4.3.5 ALSTOM FERROVIARIA S.P.A (ALSTOM) 399
4.3.6 AZIENDA TRASPORTI MILANESI S.P.A (ATM) 400
4.4 THE DBOT CONCESSION CONTRACT AND SUPPLEMENTARY CONTRACT
(VARIANTE GARIBALDI) 400
4.4.1 PURPOSE AND DURATION 400
4.4.2 CONCESSION HOLDER S GRANTS AND FEES 400
4.4.3 REVISION OF THE CONCESSION 401
4.4.4 PENALTIES 402
4.4.5 CONTRACT TERMINATION 403
4.5 CONSTRUCTION CONTRACT AND OPERATIONS & MAINTENANCE CONTRACT 404
4.5.1 CONSTRUCTION CONTRACT 404
4.5.2 OPERATIONS & MAINTENANCE CONTRACT 405
4.6 FINANCIAL STRUCTURE.. 406
APPENDIX 1 THE STRUCTURE AND FUNCTIONING OF THE SIMULATION MODEL 409
INTRODUCTION 409
A1 BREAKDOWN OF THE FINANCIAL MODEL 409
AL.L ASSMPT. (ASSUMPTION) SHEET 410
A1.2 SPONSOR_CAP SHEET (CAPEX ANALYSIS) 412
AL .3 SENSITIVITIES SHEET 413
A1.4 CAPEX SHEET 414
A1.5 LIFE CYCLE COSTS SHEET 415
A1.6 VAT SHEET 416
AL .7 DEPRECIATION SHEET 417
A1.8 GRANT SHEET 418
A1.9 ENERGY_REV SHEET 419
A1.10 WATER_REV SHEET 420
AL.LL OPEX SHEET 421
A1.12 P&L (PROFIT & LOSS) SHEET AND SP (BALANCE SHEETS) 422
A1.13 IRES (ITALIAN CORPORATE INCOME TAX) AND TAX SHEETS 422
A1.14 WORK_CAP SHEET 425
A1.15 GUARANTEE_FAC SHEET 425
A1.16 DEBT SHEET 425
A1.17 EQUITY SHEET 429
A1.18 CASH ROW SHEET 430
A1.19 IRR (INTERNAL RETURN RATE) SHEET 431
A1.20 SUMMARY SHEET 432
GLOSSARY AND ABBREVIATIONS 433
REFERENCES 445
INDEX 453
|
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| author | Gatti, Stefano 1967- |
| author_GND | (DE-588)135687659 |
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| author_sort | Gatti, Stefano 1967- |
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| building | Verbundindex |
| bvnumber | BV042324532 |
| ctrlnum | (OCoLC)904177902 (DE-599)BVBBV042324532 |
| edition | 2. ed. |
| format | Book |
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| id | DE-604.BV042324532 |
| illustrated | Not Illustrated |
| indexdate | 2024-07-10T01:18:27Z |
| institution | BVB |
| isbn | 9780123919465 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-027761393 |
| oclc_num | 904177902 |
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| owner_facet | DE-Aug4 DE-1049 |
| physical | XXX, 464 S. |
| publishDate | 2013 |
| publishDateSearch | 2013 |
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| publisher | Elsevier/Academic Press |
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| spelling | Gatti, Stefano 1967- Verfasser (DE-588)135687659 aut Project finance in theory and practice designing, structuring, and financing private and public projects Stefano Gatti 2. ed. Amsterdam [u.a.] Elsevier/Academic Press 2013 XXX, 464 S. txt rdacontent n rdamedia nc rdacarrier BUSINESS & ECONOMICS / Investments & Securities / General bisacsh Wirtschaft Public works / Finance Construction industry / Capital investments BUSINESS & ECONOMICS / Investments & Securities / General / bisacsh Projektfinanzierung (DE-588)4047425-2 gnd rswk-swf Projektfinanzierung (DE-588)4047425-2 s 1\p DE-604 SWB Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=027761393&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis 1\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk |
| spellingShingle | Gatti, Stefano 1967- Project finance in theory and practice designing, structuring, and financing private and public projects BUSINESS & ECONOMICS / Investments & Securities / General bisacsh Wirtschaft Public works / Finance Construction industry / Capital investments BUSINESS & ECONOMICS / Investments & Securities / General / bisacsh Projektfinanzierung (DE-588)4047425-2 gnd |
| subject_GND | (DE-588)4047425-2 |
| title | Project finance in theory and practice designing, structuring, and financing private and public projects |
| title_auth | Project finance in theory and practice designing, structuring, and financing private and public projects |
| title_exact_search | Project finance in theory and practice designing, structuring, and financing private and public projects |
| title_full | Project finance in theory and practice designing, structuring, and financing private and public projects Stefano Gatti |
| title_fullStr | Project finance in theory and practice designing, structuring, and financing private and public projects Stefano Gatti |
| title_full_unstemmed | Project finance in theory and practice designing, structuring, and financing private and public projects Stefano Gatti |
| title_short | Project finance in theory and practice |
| title_sort | project finance in theory and practice designing structuring and financing private and public projects |
| title_sub | designing, structuring, and financing private and public projects |
| topic | BUSINESS & ECONOMICS / Investments & Securities / General bisacsh Wirtschaft Public works / Finance Construction industry / Capital investments BUSINESS & ECONOMICS / Investments & Securities / General / bisacsh Projektfinanzierung (DE-588)4047425-2 gnd |
| topic_facet | BUSINESS & ECONOMICS / Investments & Securities / General Wirtschaft Public works / Finance Construction industry / Capital investments BUSINESS & ECONOMICS / Investments & Securities / General / bisacsh Projektfinanzierung |
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